New to this - really not sure what to do!

kittykitten

I'm currently in the process of buying my first house (hopefully!) Am awaiting solicitors doing whatever it is they do (very slowly!) but hope to be in, assuming nothing goes wrong, by middle of July. I understand (rightly or wrongly) that I am obliged to take up gas and elec initially with whoever it is supplies the house at the moment (don't know who) and then once I'm in and sorted I can switch. I've been doing price comparison beased on average estimates for a sinlge person living in the type of house I'm buying, looking at fixed tarrifs. NPower comes out best, fixed til 31st July 2012, but for an extra £48 per year EDF tarriff is fixed til 31st March 2014.

I know we can't predict the future, but having never done this before I struglle to make these sorts of decisions and was wondering what people think about paying the extra for a longer fix?

Premier_2

kittykitten wrote: »

I'm currently in the process of buying my first house (hopefully!) Am awaiting solicitors doing whatever it is they do (very slowly!) but hope to be in, assuming nothing goes wrong, by middle of July. I understand (rightly or wrongly) that I am obliged to take up gas and elec initially with whoever it is supplies the house at the moment (don't know who) and then once I'm in and sorted I can switch. I've been doing price comparison beased on average estimates for a sinlge person living in the type of house I'm buying, looking at fixed tarrifs. NPower comes out best, fixed til 31st July 2012, but for an extra £48 per year EDF tarriff is fixed til 31st March 2014.

I know we can't predict the future, but having never done this before I struglle to make these sorts of decisions and was wondering what people think about paying the extra for a longer fix?

As you say, no one knows what the future holds.

Last Christmas some were suggesting prices would be falling now - how wrong were they?

What can be said is that oil prices (which set European gas prices, and hence electric prices since alot of electric is produced by gas) is at a high at present. It's this sustained high price that has driven SP (and presumably others shortly) to now increase prices.

As an indication, remember prices rose last December, but fell in March 2010 and fell in March 2009 (but that followed big rises earlier)

If you want the certainty of knowing what you will pay for the next 3 years, (which you may do as this is your first property and most people find themselves on tight budgets at such time) go for the fix.

But be aware that 3 years is a heck of a long time, and no one knows which way market prices will go. But if you fix, you will know what you will pay whether the general price goes up ... or down!

(Don't forget there are also the switching tarts that will tell you to bag the £100+ cashback offers that come out regularly, irrespective of tariff price. Some claim to fund their entire energy bills this way)


Edit: just seen a post by macman, who suggests even 1 year is a long time in the current market
http://forums.moneysavingexpert.com/showpost.php?p=44378696&postcount=2

kittykitten

Thanks loads to both of you for the advice.

It's hard to say if my budget would be shot to pieces by a price rise, as it depends what we're talking in terms of rises - I've budgeted high for gas and elec when I did my predictive budget while deciding what I could afford in the way of mortgage - I played it safe by using what my mum and dad pay for gas and elec at present as a budget number - bearing in mind that is 3 of us living in a 4 bedroom semi, including the fact that my dad works some odd shifts so there's central heating on all day over the winter probably somewhere between a third and half of the weekdays, whereas there'll just be little old me in my new house (a 2 bed semi if this sale ever goes through - I'm giving up hope of solicitors ever actually finding a speed faster than crawl!) and I work mon-fri so no central heating through the day except weekends.

Based on that I could probably comfortably stand a rise of £10 per month as based on the quotes I have I'll pay at least this less per month than I'd originally budgetted for. Could probably stretch ok to £20 per month rise, but any more than this might be a slight budget issue. It's also hard to say cos this is the first time I'll have lived alone in a property where bills aren't just included in rent.

I didn't use actual figures for predicted gas & elec when doing quotes - all the comparison websites made their own average based on the info I provided about size of house, number of people in property, the fact that it's gas hob, gas central heating, electric oven, etc etc.

Thanks loads also for the walk-through of how to handle the whole moving in thing. One question though - how do I find out who is the current provider? Seeing as I've never actually met the current owner and there's something odd about the whole situation - the property is empty, EA tells me it's the daughters (note the plural?!) of the owner who are doing the selling, information about the house can be hard to come by. My solicitor is having a hard time at the moment getting info from the other side about guarantees for windows etc. I'm wondering if the owner has either died or gone into care, or maybe moved away? So might struggle to find who the providers are. Is there some sort of register of these things, or would I, worst case scenario, have to spend an afternoon on the phone ringing around til I find the providers? And how do I actually open the covers on the external meters to take meter reading photos on moving day? Is it like radiator keys where any meter box key will fit, or like window keys where I need one specific to those meter boxes? I can see me having to break into them here? If they're like prepay meter boxes that's fine, as a housing association manager I met through my work with a patient we had in common showed me a neat trick with the lid of one of those cheap biros that have hexagonal lids when we visited my patient's property!

I note with interest the info about length of fix, etc. I don't actually know what the exit penalties are on the quotes I was looking at, but am interested in the idea that a year is seen as a long time in the gas and elec game. I guess I was looking at this in the same way I looked at my mortgage, which is fixed for 3 years, so I can guarantee my monthly outgoings.

Many thanks again for the help, I'm completely clueless at this!